By | November 8, 2019

 By , NC Policy Watch

Rick Allen’s Nautilus Productions sued the state of North Carolina for posting its photos and videos of the ship online without permission. The video production company was documenting the salvaging of the shipwreck and Allen had registered the work with the U.S. Copyright Office. At the center of the dispute is whether federal law protects the copyrighted work from infringement and whether states are immune from certain copyright infringement claims under the 11th amendment to the Constitution.

The Wall Street Journal covered the oral arguments at the high court.

A federal appeals court in Richmond, Va., dismissed the claim, finding that North Carolina, as a state government, couldn’t be sued for infringement.

Justice Stephen Breyer suggested that if that view prevailed, every state could turn to piracy of intellectual property to plug its budget holes.

A state government could set up its own online streaming service, “charging $5 or something to run ‘Rocky,’ ‘[Captain] Marvel,’ ‘Spider-Man’ and perhaps ‘Groundhog Day,’” Justice Breyer said. “Several billion dollars flows into the treasury. Now, if you win, why won’t that happen?”

North Carolina’s lawyer, Ryan Park, said the remedy should be a court injunction blocking further copyright infringement, not exposing the state to damages. He stressed the flip side of that hypothetical, arguing that the high damages federal law prescribes for copyright infringement—$150,000 per incident—could prove costly to state taxpayers.

“When you sue a sovereign, on the opposite side of the judgment are the people and the people’s money,” Mr. Park said. “Our cultural-resources department is operating on a shoestring budget.”

The state initially paid Nautilus a $15,000 settlement in 2013 and agreed not to use the copyrighted material going forward, but eventually began using it again and subsequently passed “Blackbeard’s Law” which converted the work to public record, according to the court documents.

Mr. Allen claimed the state continued to infringe his copyrights by posting too much material online and not including the watermark and time stamp. The North Carolina legislature responded by enacting “Blackbeard’s Law,” which allows the state to use as it wished any materials documenting the salvage of a shipwreck.

Justice Sonia Sotomayor said she found Blackbeard’s Law “deeply troubling.” But she and other justices pointed to a 1999 Supreme Court precedent, known as Florida Prepaid, which struck down a federal law that exposed state government to suits over patent infringement. The court said then that Congress hadn’t established that states were infringing patents so wantonly as to justify curbing their sovereign immunity.

Justice Elena Kagan suggested Mr. Allen likewise had failed to show states were prolific copyright pirates; he identified 16 such incidents.

Read the full Wall Street Journal report here.